Survival of Salem County Hospital Depends on Disputed Trust Fund

The Memorial Hospital of Salem County, which has been struggling for years, remains on life support and desperately needs an infusion of cash from a trust fund to keep its doors open, state lawmakers said.

A trio of lawmakers led by State Senate President Steve Sweeney (D., Gloucester) called for the return of the $51 million trust fund to Salem County to help facilitate the sale of the hospital. The money was set aside for the Salem Health and Wellness Foundation when the hospital was sold earlier, in 2002.

“This is not their money, it belongs to the people of Salem County and is supposed to be used to support medical care in the area,” said Sweeney said in a statement. “The funds are a key ingredient to facilitate the sale to a non-profit that will keep the hospital open and provide medical care for the region. Salem Memorial is the only acute care facility in the region and it is needed to provide medical care.”

Sweeney, joined at a news conference outside the hospital by Deputy Assembly Speaker John Burzichelli and Assemblyman Adam Taliaferro, also Gloucester County Democrats, said the funds would be used by the Inspira Health Network, which wants to buy the hospital.

The lawmakers said Community Health Systems, Memorial’s industry-giant parent company, has been trying to complete a deal with Inspira, but the trust fund is key to the transaction. The trust fund, designated as “charitable assets” was sent several years ago by the Salem Foundation to the Community Foundation of New Jersey in Morris County, Sweeney said.

“The Community Foundation of New Jersey and Salem Health and Wellness Foundation remain open to on-going conversations with all parties to deliver improved health and wellness to the people of Salem County,” Brenda L. Goins, executive director of the Salem Health and Wellness Foundation said in a statement. “As with other potential acquisitions of the hospital, we have expressed a willingness to support the purchase with an investment from the Foundation.

South Jersey lawmakers have been pushing for a sale of the hospital since 2002 when they passed a law to allow for the purchase of the nonprofit hospital for $35 million by Community Health Systems. It was the first such purchase in New Jersey by a for-profit health care system. The funds were invested and have grown to $51 million, Sweeney said.

“Our big concern is that this hospital closes,” Sweeney said in an interview Tuesday. “It’s a real threat and it’s a real concern.”

The 126-bed hospital has been struggling for years, losing money, patients, and staff. It closed its maternity ward in 2014. Cooper Health System took over operations of its emergency room several years ago.

Memorial Hospital was founded in 1919 in downtown Salem City. It moved to its current location in Mannington Township in 1951.